This guide will explain how Staircasing works, how equity grows, and whether buying more shares could make financial sense for you.
What is Staircasing and how does it work?
Staircasing means buying more shares in your Shared Ownership home over time.
You start by owning a percentage of the property and paying rent on the remaining share, then you have the chance to increase your ownership as your finances allow - including up to 100%.
When you Staircase the price of the share you are buying is based on the property’s current market value. For this reason the process involves an independent valuation.
For many Shared Ownership homeowners Staircasing is a practical way to build more equity over time. In the long term this can mean paying less rent as your ownership share increases.
What does equity mean in Shared Ownership?
In simple terms, equity means the value you hold in the property based on the share you own, minus any outstanding mortgage.
With Shared Ownership, your equity is linked directly to the percentage share you’ve purchased and any increase in the home’s value over time.
This is where the comparison of shared equity vs Shared Ownership often comes in. While shared equity schemes may involve loans or delayed repayments, Shared Ownership equity grows as you buy more shares and pay down your mortgage. The more you own, the more of the property’s value belongs to you.
How equity grows when you buy a share
Each time you Staircase, you increase your stake in the property.
For example, if your home is worth £300,000 and you own 40%, your equity is £120,000 (minus any mortgage). If you later buy another 20%, you now own 60% - meaning a larger slice of both the home and any future price growth.
Equity can grow in two key ways:
- Buying more shares in Shared Ownership, increasing the percentage you own
- Property value growth, meaning your owned share becomes worth more over time
While no property investment is guaranteed, Shared Ownership homes generally rise and fall with the wider housing market just like fully owned properties.
Why Shared Ownership builds equity differently from renting
Renting doesn’t build equity at all. Monthly payments go entirely to your landlord, with nothing owned at the end of it.
In contrast, Shared Ownership allows you to put money towards something you partially own from day one.
Even though you still pay rent on the unowned share, a portion of your monthly housing costs goes towards your mortgage, which steadily increases your equity.
Over time, buying more shares in Shared Ownership can significantly reduce the rent you pay and increase the value you personally hold in the property. You can read our blog on Shared Ownership vs Renting for more information.
Shared equity vs Shared Ownership: what’s the difference?
Although the terms sound similar, shared equity and Shared Ownership work differently.
Shared equity usually involves a loan to help you buy a home, which you repay later.
The amount you repay is often based on a percentage of the property’s market value when you sell, remortgage, or reach the end of the loan term. You don’t usually pay rent on the borrowed portion, but the loan must eventually be repaid.
Shared Ownership however lets you own a portion of the property from day one. You take out a mortgage on your share and pay rent on the part you don’t yet own.
This makes Shared Ownership a more tangible path toward full homeownership and long-term financial growth.
How Staircasing helps you build more equity over time
Staircasing is one of the main reasons people choose Shared Ownership over renting.
Each time you buy more shares, you increase the percentage of the home you own, helping you build more equity over time.
Over time, this can make a noticeable difference to your financial position, especially if the property increases in value.
How much does it cost to Staircase?
The cost of Staircasing depends on how much you’re buying and what the property is worth at the time. You’ll pay for:
- The value of the additional share (based on a current market valuation)
- A valuation fee
- Legal fees
- Mortgage arrangement costs, if you’re borrowing more
For example of costs, let’s look at a 1-bedroom apartment at KEWB:
- Full market value: £427,500
- Current share owned (25%): £106,875
- Monthly rent on the unowned share: £735
- Monthly mortgage: £521
- Monthly service charge: £219
If you decided to Staircase by purchasing an additional 10%, it could cost around £44,750.
This is an estimate of the value of the extra share and any valuation, legal, mortgage and administration costs.
What happens when you own a larger share?
As your ownership percentage increases, you will pay rent on a smaller portion of your home.
In some cases, owning a larger share can also make re-mortgaging easier or improve your borrowing options.
If you reach 100% ownership, you stop paying rent altogether and own the property outright (subject to any remaining mortgage).
Can Shared Ownership properties increase in value?
Yes - Shared Ownership properties can increase in value over time, just like fully owned homes.
When the local housing market rises, the value of your property usually rises too, which means your share becomes worth more. Bear in mind that the value can also fall.
The amount your home is worth will be confirmed through a valuation when you Staircase or sell, rather than being based on the price you originally paid.
This means market conditions at the time will affect both the cost of buying more shares and the value you receive when selling.
How market changes affect your share value
The value of your share will depend on two things: the percentage you own and the current market price of the property.
For example, if you own 50% of a home and the property increases in value from £200,000 to £220,000, the value of the share rises from £100,000 to £110,000. Conversely, if the market drops, your share may be worth less.
This also means that if you Staircase to buy more shares you’ll have greater exposure to any future changes in the property’s value - whether prices rise or fall.
Is Shared Ownership a good investment?
Shared Ownership can be a smart step toward building wealth, especially compared with renting.
You’re putting money into an asset you own, rather than paying rent that disappears every month. You also have the chance to Staircase and buy more shares in your home over time.
Comparing long-term value vs renting
When you rent, your payments go entirely to your landlord. With Shared Ownership, part of your monthly costs goes toward your mortgage, and over time, your equity grows as you buy more shares.
If the property increases in value, that equity grows faster which is something renters never benefit from.
For example:
If you buy a 25% share of a £400,000 home, your initial share is worth £100,000. If the property value rises by 10% to £440,000, your share automatically increases to £110,000. This means you’ve gained £10,000 in equity simply by owning a portion of the home.
Meanwhile, a renter paying the same monthly cost would gain £0 in long‑term value.
Shared Ownership is often more affordable than renting in the long term
New research has shown that Shared Ownership is a more affordable option than private renting across the UK in most cases. Studies show that in 93% of local authorities, Shared Ownership is projected to be less expensive than renting after 10 years.
This affordability is amplified when considering long-term financial benefits, with shared owners typically gaining around £29,000 in equity growth due to capital repayments and house price increases, and £42,000 in London.
When does Shared Ownership make financial sense?
Shared Ownership can make financial sense if you want to get onto the property ladder but can’t afford a full mortgage, or if you plan to live in the home for several years.
It works best for those who are financially stable enough to staircase over time, because each additional share increases equity and reduces rent.
For many Shared Ownership homeowners, it’s a stepping stone from renting to full ownership.
Frequently asked questions about building equity with Shared Ownership
Yes. You can buy a larger additional share in one go, as long as you can afford it. You can purchase multiple shares in one go as long as you can afford them. This is known as interim staircasing and allows you to increase your ownership in larger steps rather than small increments.
For example, if you initially bought 25%, you could later buy another 10%, 25% or any permitted share size depending on what you can afford at the time.
If you are Staircasing with a mortgage, you don’t always need to save a new cash deposit because the equity you already own in your home can act as the deposit for the new share.
Often, yes, but it does depend on your financial situation and plans. Staircasing can offer several long‑term benefits:
Benefits:
- Lower rent: As you buy more shares, the portion you pay rent on decreases. Staircasing to 100% removes rent altogether.
- Build more equity: Owning a larger share means you benefit more from any increase in your home’s value.
- Greater flexibility when selling: At 100% ownership, you can sell on the open market, giving you access to a wider pool of buyers.
Considerations:
- Each staircasing transaction comes with fees (valuation, legal, administration, potential stamp duty).
- Your mortgage payments may rise depending on market rates when you staircase.
Yes. Staircasing can give you more control over how your monthly costs are split between rent and mortgage payments.
Buying more shares can help you rely less on rent over time and build a larger ownership stake in the property.
